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Tuesday, January 06, 2009
Dan Caplinger :: Townhall.com Columnist
The Easy Way to Make Your First Million
by Dan Caplinger
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If you're reading this, you've already gotten past the hardest part of investing in today's markets. Plenty of people have simply turned off their computers, stopped reading financial news and brokerage statements, and taken to hoping that someone will eventually sound the all-clear sometime down the road.

But you know everything won't get better all by itself. To master investing, you can't just coast through the good times as your account balances rise seemingly without any effort at all. No, Fool, you have to know that your investments will get you through the bad times as well.

If you're looking for a simple way to stay on the path toward financial success, look no further. Here's an investing strategy even a beginning investor can follow.

Get what you need
When you first start investing, sticking with simple investments gives you a great introduction to the financial world. Although there's a world of different types of investments out there, focusing on large-cap companies you already know something about makes an ideal first step. Stocks such as Coca-Cola (NYSE: KO) and Home Depot (NYSE: HD) may not have much potential for multiplying your investment 100-fold in the next 10 years, but they will give you a comfortable foundation to build on as you get more investing experience.

Once you have a few picks under your belt, though, you'll realize that there's a lot more to investing than just the household names you're most familiar with. But where should you go next? To help you answer that question, look at the following stocks:

Stock

Market Cap (Millions)

Current P/E

Projected 5-Year Growth Rate

Dividend Yield

Intuitive Surgical (Nasdaq: ISRG)

$5,180

26.1

31.6%

0%

Blackboard (Nasdaq: BBBB)

$840

203

25%

0%

Merck (NYSE: MRK)

$65,540

14.8

4.6%

4.9%

ChinaMobile (NYSE: CHL)

$215,400

N/A

20.1%

3%

Dow Chemical (NYSE: DOW)

$14,240

5.6

7%

10.9%

Source: Yahoo! Finance. As of Jan. 2.

As you can see, this list has a bunch of different sorts of stocks. Some have healthy growth prospects, while others just seem to have their businesses treading water. Some pay their shareholders a strong stream of cash income, while others are plowing every penny they earn back into their operations to keep their growth up. And these companies span the globe and include every stage of development, from up-and-coming hopefuls to the bluest of the blue-chip names.

What to buy
Luckily, there's no one right way to invest. What you'll probably find, though, is that certain types of stocks will naturally resonate with you. For instance:

limits your opportunities. With many brokers making it easier to invest internationally, world-wise investors have the entire globe at their fingertips.

Even if you gravitate toward one particular type of stock, you'll still want to know enough about all of them to put together a strong, diversified portfolio. That's where the right help becomes invaluable.

In their new book, The Motley Fool Million Dollar Portfolio, Motley Fool co-founders David and Tom Gardner talk about the methods they use to find great stocks of all kinds -- and how they put them together into a portfolio that will make you a millionaire in time. To learn more about their recommendations, find out how you can get on the path to your first million today.

For more on getting to your first million:

pick value or growth stocks?How to capitalize on a falling market.Some great stock ideas for you to look at today.
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About The Author

Dan Caplinger is a contract writer for The Motley Fool.

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